TMI Blog1964 (2) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, and giving the appellant the option under Section 183 paying a fine of Rs. 25 lakhs in lieu of confiscation. The appellant contends that this order has been based upon a misconstruction of the provisions of Section 52A. 2. The vessel "Eastern Saga" has 6,631 gross registered tons, and 4,441 net registered tons. It has an overall length of 475'.2.1/2" a breadth of 59'.3" and summer draft of 24'.7". It carries a crew of 14 officers and 56 seamen. It appears that the vessel has 119 separate rooms, including 34 crews' cabins, 8 passengers' cabins, a sailor's mess, a fireman's mess, a compradore's office, a hospital, a boys' mess, a ships office, an Engineer's office, saloon, lounge, pantry, chart-room, radio officer's cabin, captain's cabin, wheel house, alley-ways, and stairways. It is clear that the vessel is a well-equipped big vessel. It has also domestic refrigeration compartments which are lined by insulated walls. All crew accommodation in the vessel has been insulated as required by statutory regulations. Such insulation consists of a sheathing or panelling of fibre board or similar material tacked to wooden frames inserted between the stiffeners jutting out from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over painted. The hold opened into a space and in that space, the Customs Officers found a large quantity of gold in bars. Further search in the sailors' accommodation led to the discovery of a hole in the wall panelling behind a steel clothes locker which was closed with a wooden plug. Nothing was found in it. That is how a search was made by the Customs Officers on Eastern Saga and in one of the holes a large quantity of gold in bars was discovered. 4. On November 12, 1957 notices were served on the owners' Agents at Calcutta M/s Jardine Henderson and Co. Ltd., and on the master of the vessel, Captain Kiunear, respectively to show cause why the vessel should not be confiscated under Section 167(12A) since it had contravened Section 52A of the Act and penal action should not been taken against the agents and the master in that behalf. On the same day, a notice in similar terms was issued to Kwok Cho, a member of the crew of the Eastern Saga who had come forward to claim the gold which was discovered as a result of the search. On November 13, 1957, a further notice to show cause was served on the master in regard to another hole which had been discovered after the issue of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 167(12A). In regard to other matters, the explanations offered appeared to him to be unsatisfactory and unacceptable. His conclusion, therefore, was that the vessel had clearly rendered itself liable to confiscation under Section 167(12A) because it had infringed the provisions of Section 52A. The quantity of gold found on the vessel was approximately of the value of Rs. 23,79,490.80nP @ Rs. 109.24nP per tola, and he noticed the fact that this was the recovery made in one of the several cavities found on the ship. He was, therefore, inclined to infer several holes discovered in the vessel indicating the extent to which the hiding places were used for contravening Section 52A. That is why he confiscated 1,358 gold bars discovered as a result of the search absolutely under Section 167(8) read with Section 23A of the Foreign Exchange Regulations Act. He also imposed a personal penalty of Rs. 10,000/- on the sailor Kwok Cho. In regard to the ship, he directed that Eastern Saga be confiscated under Section 167(12A) and in lieu thereof, he gave the owners of the ship an option to pay a fine of Rs. 25 lakhs which he directed should be paid within 30 days of the date of the despatc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of Article 136(1). The Additional Solicitor-General argues that neither the Customs Collector, nor the Central Board of Revenue, nor the Central Government is a Tribunal, and so, special leave granted to the appellant should be revoked on that ground. 9. It is settled by decisions of this Court that the Customs Officer who initially acts under Section 167(12A) is not a Court or Tribunal, though it is also settled that in adjudicating upon the question as to whether Section 52A has been contravened by any ship and by such contravention the said ship has made itself liable to confiscation under Section 167(12A), the Customs Officer has to act in a quasi-judicial manner. In Sewpujanrai Indrasanrai Ltd. v. Collector of Customs, AIR 1958 SC 845 = 1983 E.L.T. 1305, this Court has held that an order of confiscation or penalty passed under the Sea Customs Act is not a mere administrative or executive act but is really a quasi-judicial act, and, therefore, an application for a writ of certiorari lies in respect of such order under Article 226 of the constitution. In expressing this conclusion, S.K. Das, J. who spoke for the Court, has referred to two earlier decisions where thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sections 190 and 191 of the Act did not fall to be considered in that case, was not argued and naturally has not been examined, and so, this observation cannot be treated as a decision on the question which has been argued before us in the present appeal. The result, therefore, is that it is no longer open to doubt that the Customs Officer is not a Court or Tribunal though in adjudicating upon matters under Section 167 of the Act he has to act in a judicial manner. It may be conceded that neither the Central Board of Revenue, nor the Central Government is a Court within the meaning of Article 136. 11. The question which then arises is can the Central Board of Revenue exercising its appellate power under Section 190 of the Act, or the Central Government exercising its revisional jurisdiction under Section 191, be held to be a Tribunal under Article 136. It is clear that before an appeal can be entertained in this Court under Article 136, two conditions have to be satisfied; the order impugned must be an order of a judicial or quasi-judicial character and should not be purely an administrative or executive order; and the said order should have been passed either by a Court or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relating to their civil rights, and the Central Government was invested with the power to determine that dispute according to law. This dispute was in regard to the claim made by a transferee of a Company's shares to have his transfer registered in the Company's register, and the view which this Court took was that when such a dispute goes before the Central Government under Section 111, it has to consider and decide the proposal and the objections in the light of the evidence and not on grounds of policy or expediency. That is why this Court came to the conclusion that the Central Government was a Tribunal under Article 136 of the Constitution. 13. In support of the view taken on this point, this Court referred to an earlier decision in Shivji Nathubhai v. Union of India, 1960-2 SCR 775, where it was held that the Central Government exercising power of review under Rule 54 of the Mineral Concession Rules, 1949 against an administrative order of the State Government granting a mining lease was subject to the appellate jurisdiction of this Court, because the power to review was judicial and not administrative. Thus, these two decisions show how the character of the adjudication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Penal Code. Under Section 183, the officer adjudging the matter brought before him under Section 167 of the Act is empowered to give an option to a person to pay a fine in lieu of confiscation. 15. Having thus broadly referred to the provisions relating to adjudication by the Customs Officer, we would now examine the provisions in regard to appeals and revisions made by the Act. Section 188 provides for an appeal against any decision or order passed by any officer of Customs, and it requires that the said appeal must be filed within three months from the date of the order or decision challenged. This appeal lies to the Chief Customs Authority, or in such cases as the Central Government directs, to any Officer of Customs not inferior in rank to a Customs Collector and empowered in that behalf by name or in virtue of his office by the Central Government. The Section further provides that the appellate authority may make such enquiry and pass such order as it thinks fit, confirming, altering or annulling the decision or order under appeal. The proviso to this section makes it clear that no order passed in appeal can impose upon the person any greater confiscation, penalty or rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de under Section 167(12A) and an option is given to the owner of the offending ship under Section 183, the initial proceedings taken under the Act come to an end and a stage is reached for making an appeal against the order of confiscation or the imposition of fine. In the present appeal, we are concerned with the subsequent stage of the proceedings, because what we have to decide on the preliminary objection raised by the Additional Solicitor-General is the status or character of the Appellate authority or the Central Government which exercises its revisional jurisdiction. In our opinion, having regard to the scheme of the sections which we have just cited, there is no difficulty in holding that the Central Board of Revenue which functions as an Appellate authority, and the Central Government which exercises revisional powers are both Tribunals within the meaning of Article 136 of the Constitution. A dispute is raised either by way of appeal or revision by the party aggrieved by the order passed by the Customs Officers, and that dispute has to be tried by the Appellate or the Revisional authority in the light of the facts adduced in the proceedings and according to law. All the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oudhary. Section 52A provides that no vessel constructed, adapted, altered, or fitted for the purpose of concealing goods shall enter, or be within the limits of any port in India, or the Indian customs waters. This section is the only section included in Chapter VIA and it was inserted by Act 10 of 1957. The plain construction of this section appears to be that whenever a ship answering the description contained in its first part enters or is within the limits of any port in India, or the Indian customs waters, it contravenes the prohibition prescribed by it. The prohibition is against the construction, adaptation, alteration or fitting for the purpose of concealing goods. What has to be proved against a vessel which is charged with having contravened Section 52A is that there has been a construction, adaptation, alteration or fitting, and that the said construction, adaptation, alteration or fitting has been made for the purpose of concealing goods. Therefore, if an alteration in a vessel made for the purpose of concealing goods is proved, the contravention of Section 52A must be inferred. In other words, the section prohibits absolutely the entry of vessels which show that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is some force in Mr. Choudhary's argument that the element of mens rea should not be excluded in considering the scope and effect of Section 52A of the Act. 22. On the other hand, the scheme of Section 167 supports the contention of the Additional Solicitor-General that if we read Section 52A along with Section 167(12A), it would be clear that the legislature intends, by necessary implication, the exclusion of mens rea in dealing with he contravention of Section 52A. Section 167(12A) provides that if a vessel constructed, adapted, altered or fitted for the purpose of concealing goods under Section 52A, enters or is within the limits of any port in India or within the Indian Customs waters such vessel shall be liable to confiscation and the master of such vessel shall be liable to a penalty not exceeding Rs. 1,000/-. It would be noticed that in Column 1, Section 167(12A) reproduces the material words of Section 52A and does not add the words "knowingly or wilfully". It is significant that the words "knowingly or wilfully" are used in several other provisions contained in Section 167. Section 167(14) and Section 167(61) use the word "wilfully" in respect of the commission of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, for motives of profit making, undertakes this activity. That is why Section 52A makes an absolute prohibition against the entry of a vessel which contains, inter alia, any alteration made for the purpose of concealing goods. Entry of contraband gold with the help of ships has thus become a serious problem and is intended to be checked by this absolute prohibition. If it was held that the knowledge of the owners of the offending vessel or of its master should be proved before Section 52A is held to be contravened, in a majority of cases, the offending vessels will escape punishment. It is not difficult to imagine that mesn rea or guilty mind could rarely be established against the owners of vessels which are travelling on the High-seas and it may not be always easy to prove the guilty knowledge even of the master of the ship. If the guilty mind is made an essential constituent of the section, it would be very easy both for the owners and the master of the ship to plead that the alleged alteration, adaptation or fitting was made without their knowledge and even contrary to their instructions. It is not difficult to realise in this connection that it would be almost impossible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggests that it was intended to serve some secret purpose, it would be easy to draw the inference that its purpose was to conceal goods. Therefore, in our opinion, there is no doubt that the Customs Authorities were right in holding that the mere fact that the owners of the vessel or the master were not shown to have been privy to the alteration etc. or the concealment of gold bars recovered from the offending ship would not take the case of appellant outside the purview of Section 52A. The knowledge of the owners, or even of the master is, in the context of Section 52A, entirely irrelevant. What is relevant is the proof of the fact that the vessel answering the description prescribed by Section 52A entered within the limits of Calcutta which is a port in India. 27. Mr. Choudhary further argued that the alteration on which the case against the appellant is based in the present case cannot be said to be an alteration contemplated by Section 52A, because it is not an alteration of the vessel. He suggests that the construction, adaptation, alteration or fitting must be of the vessel as a whole, or, at any rate, of any part of the vessel which can be regarded as its integral or ess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... faintly urged before us, that the holes made in the panelling walls do not constitute an alteration at all is clearly ill-founded, because the manner in which the holes were made and the use which was obviously intended to be made of the said holes, leave no doubt that they constitute alteration within the meaning of Section 52A. Thus, our conclusion is that the Customs Authorities were right in holding that the facts proved in the case showed that the appellant's vessel Eastern Saga contravened the provisions of Section 52A when it entered the port of Calcutta and as such, incurred liability prescribed by Section 167(12A) of the Act. 29. What is the nature of the liability prescribed by Section 167(12A) is the next question which calls for an answer in the present appeal. We have already seen that Section 167(12A) provides that if a vessel contravenes Section 52A, it shall be liable to confiscation and the master of such vessel shall be liable to a penalty not exceeding Rs. 1,000/-. Can it be said that the penalty prescribed by Section 167(12A) may in any given case not be imposed against the ship on the ground that the contravention proved against it is of a very trivial charac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of some penalty against the master is another statutory consequence of the same contravention. In fairness, we ought to add that Mr. Choudhary did not support the view which appears to have been taken by Sinha, J. in the case taken before him under Article 226 by the Everett Orient Line Incorporated (vide W.P. No. 121/1959 and C.A. No. 374/1961 which have been heard along with this appeal and will be dealt with separately). It appears that in that case Sinha, J., held that there was discretion in the Customs Authority in the exercise of which it may, in a proper case, refuse to confiscate the offending vessel. In our opinion, this view is not justified by the words of clause (12A) of Section 167. 30. But the confiscation of the offending vessel under clause (12A) is not the end of the matter. In dealing with the offence adjudicated under Clause (12A) of Section 167, the Customs Officer has also to exercise his jurisdiction under Section 183 of the Act. In fact, Section 167(12A) and Section 183 have to be read together and the adjudication proceedings have to be dealt within the light of the provisions of the said two sections. Section 183 lays down that whenever confisca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s provided that the offending ship should be retained, if the offence is proved, it should be confiscated and the owner of the vessel should be given an option to get his vessel released by paying the fine which may be imposed on him under Section 183. The very fact that an option has to be given to the owner shows that the fine imposed under Section 183 is not a matter of penalty imposed by the officer as such, but is only an option given to the owner. Therefore, we are satisfied that on a fair reading of Section 167(12A) and Section 183 of the Act, the course adopted by the Customs Authorities is not open to any challenge. 31. Mr. Choudhary then attempted to argue that on the merits, the Central Board of Revenue was in error in holding that Section 52A had been contravened by the appellant's vessel Eastern Saga. We have already indicated in brief the findings recorded by the Customs authorities. It is true that the Additional Collector of Customs accepted the plea of the appellants that the owners of the vessel were not concerned with the illegal importation of gold into India within the meaning of Section 167(8) of the Act; but he has also found that the preventive measures ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t prepared to hold that the fine is unreasonable or excessive. We have already noticed the value of the gold illegally imported and we have seen the presence of many suspicious alterations in the panelling walls and other parts of the vessel. It is not easy to detect the illegal importation of gold, and so, if the Customs Authorities took the view that having regard to the value of the gold imported, the presence of a large number of alternations and the value of the ship, Rs. 25 lacs should be imposed as a fine, we cannot entertain the argument that a case is made out for our interference under Article 136 of the Constitution. After all, the imposition of the fine merely gives an option to the appellant to pay the fine and secure the release of the vessel. Since the amount of the fine imposed is very much less than the value of the vessel, it is the interest of the appellant to get the vessel released. Besides, the question as to the propriety of the fine imposed by the Additional Collector of Customs has been examined by the Appellate and the Revisional authorities and they have seen no reason to interfere with the amount of fine. In such a case, the appellant cannot be heard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional and invalid. We do not propose to consider the merits of this argument, because the appellant is not only a company, but also a foreign company, and as such, is not entitled to claim the benefits of Article 19. It is only citizens of India who have been guaranteed the right to freedom enshrined in the said article. If that is so, the plea under Article 31(1) as well as under Article 14 cannot be sustained for the simple reason that in supporting the said two pleas, inevitably the appellant has to fall back upon the fundamental right guaranteed by Article 19(1)(f). The whole argument is that the appellant is deprived of its property by operation of the relevant provisions of the Act and these provisions are invalid. All that Article 31(1) provides is that no person shall be deprived of his property save by authority of law. As soon as this plea is raised, it is met by the obvious answer that the appellant has been deprived of its property by authority of the provisions of the Act and that would be the end of the plea under Article 31(1) unless the appellant is able to take the further step of challenging the validity of the Act, and that necessarily imports Article 19(1)(f). s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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